N.J. gives Tesla two more weeks to comply with dealer regulations

By Andrew George,
March 31, 2014 at 12:31 PM

N.J. gives Tesla two more weeks to comply with dealer regulations. - (Facebook)

After the state Motor Vehicle Commission decided earlier this month to require that all new cars be sold through a franchised dealer rather than directly through a manufacturer, electric carmaker Tesla was effectively banned from operating in New Jersey as of April 1.

The move, criticized by some as a direct attack on Tesla’s business model and a bow to special interest groups, would have forced the company’s two New Jersey-based showrooms in Paramus and Short Hills to abandon sales and transform into informative galleries that direct potential customers to locations in New York and Pennsylvania.

For at least the next two weeks, that appears to be on hold after the commission announced late last week that the deadline for compliance with the new regulations has been pushed back to April 15.

“The MVC last week sent out letters to all new car dealers,” commission spokesperson Elyse Coffey told NJBIZ Monday. “The letter explains that dealers who sell new cars are being given until April 15th to comply with MVC dealer licensing regulations that require the submission of a copy of their franchise agreement.”

Coffey said she could not comment further on the matter.

Since the initial decision, Tesla chairman Elon Musk has been heavily critical of Gov. Chris Christie, claiming in a recent blog post that the governor “cut a backroom deal” with the auto dealer lobby in order to “circumvent the legislative process and pass a regulation that is fundamentally contrary to the intent of the law.”

The company is currently evaluating “judicial remedies to correct the situation,” Musk added.

Assemblyman Timothy Eustace (D-Paramus) and state Sen. Shirley Turner (D-Ewing) have also put forth bills that reverse the decision and allow for Tesla to operate in New Jersey with its direct-sale business model.

Christie has since said it was Tesla’s responsibility to appeal to the state Legislature, noting that it is not his call to decide when to enforce and not enforce the state’s laws.

“Their model is not legal in New Jersey under the current statute,” Christie said at a recent town hall.